Activision: Business Is Good, And Getting Better

During this in-depth interview with Gamasutra -- conducted during last week's E3 trade show in Los Angeles -- Thomas Tippl, Activision Blizzard's COO, could barely say "$3 billion in cash with no debt" without cracking a smile.

While many publishers are facing major difficulties in the complicated game marketplace of 2010, and are trying to re-entrench in a landscape that's ever-changing, Activision is currently riding high, as the industry's leading light, from at least the business perspective.

While there have been controversies over the company's relationship with its talent which spring from major layoffs and, of course, the situation that ended in the departure of Infinity Ward founders Jason West and Vince Zampella, the company has had nothing but success with its Blizzard studio and Call of Duty franchise, with World of Warcraft and Modern Warfare 2 topping the PC MMO and console game charts.

Here, Tippl explains what he sees as the keys to the company's success, and lays out its cautious future plans -- including a reluctance to enter the social gaming fray as quickly as its most major competitor, Electronic Arts, did with its Playfish acquisition.

What at E3, as a third-party publisher, has you most interested or excited? The 3DS? Motion controls?

Thomas Tippl: The best thing out of everything I've seen at E3 was Call of Duty: Black Ops. By far, the best thing I've seen. [laughs]

From a technology perspective, I think it's great that first parties are coming with new innovation on the technology side to create some new excitement to interest the consumers. The industry needs that and it's going to be a good thing.

I'd say Nintendo's 3DS, just to start there, is phenomenal. It's a great product. Again, it just shows how smart the folks at Nintendo are to recognize that to enjoy that experience, you've got to figure out how to do that without forcing people to put on glasses.

The integration with the 3D camera, you know, is just brilliant. You've got the analog stick. I mean, it's a great product. We're developing a game for it already. The screen is fantastic. I think that's going to really breathe life into the DS and the handheld market in general, particularly those who deal with some of the copyright protection issues that they're facing today on the current DS platform.

Move and Kinect, I think, will be interesting new opportunities to innovate certain franchises, but probably not for every kind of game. So, we'll have to see how much of an install base they're going to develop. A lot of that will depend on the price point they choose.

We have a few franchises where we think this could be an interesting value to improve the experience for the player. Tony Hawk is an example. We have our Rapala fishing franchise. But it's not going to be something that will be every game because I don't think it's one size fits all. It's not going to enhance the experience for every game.

Tony Hawk: Ride

Are you concerned at all about the price for those? They're expensive. And they're targeting a mass market.

TT: Yeah, a bsolutely. I think as a publisher, you have to be concerned about the price; it drives a lot of the outcome on how big of an install base there's going to be. The bigger the install base, the more likely that you can make sense out of your investment. So, the lower the price, the better. In this economic environment, it's probably more important than ever.

The executives at Activision aren't necessarily shy about coming out saying if they think something is too expensive.

TT: Yeah. You know, we're generally not shy. [laughs] But at the end of the day, it doesn't matter what we say. At the end of the day, what matters is how consumers vote with their pocket book. And that's going to be the most important thing.

There was a big shindig at the Staples Center. What was the motivation behind that, and why did you think that Activision should do something of that magnitude this year at E3?

TT: Well, I tried to convince [Maryanne Lataif, Activision VP of corporate communications] that we should just do an E3 sequel. [laughs] She told me that all of you guys cannot take another sequel. So, that's why we decided we had to come up with something that has never been done before.

Maryanne and her team have put together a phenomenal show to showcase our games, showcase the gameplay in our games, but also showcase the artists and the variety of artists that are all in our games. So, everybody that was involved in that show is part of our games. You see the kind of music artists we're attracting. All kinds of talent. You know, directors and what have you.

We just felt we did a great job with last year's show at the Wiltern Theater with Jay-Z and Eminem to introduce DJ Hero, and we thought we could take this to another level this year, introducing all of our top product in a very engaging environment that shows yet again how we are a couple of levels above our competition.

Maryanne Lataif: It's also important to note that we don't have any other presence on the show floor and didn't do a press conference. That was our showcase.